Council present: Mark Eiden, Bruce Gorecki, Darren Jakel, Shannon Klick, and Rick Ihli.

Transcription

1 Page 1 of 5 1. Call to Order. The Budget Workshop of the City Council of the City of Rogers was called to order by Mayor Ihli on Tuesday, at 6:00 p.m. at the Rogers Police Department, Industrial Court, Rogers, MN. Council present: Mark Eiden, Bruce Gorecki, Darren Jakel, Shannon Klick, and Rick Ihli. Staff present: Mike Bauer, Parks and Facilities Director, Jeff Beahen, Police Chief; Gary Buysse, Liquor Operations Director; Brad Feist, Fire Chief; Jason Greninger, IS Director; Lisa Herbert, Finance Director; Stacy Scharber, Assistant City Administrator/Clerk; John Seifert, Public Works Director; Steve Stahmer, City Administrator; and Bret Weiss, City Engineer. 2. Discussion on 2018 Budget Finance Director Herbert reviewed the 2018 Property tax levy information worksheet, comparing it to the preliminary levy set in September, highlighting the following: Tax capacity for local rate is a 7.93% increase over 2017 The tax rate is % at this time There have been no changes to the line item budgets since last Tuesday General Fund operating Levy at 5.11% increase over last year. Herbert then reviewed all other line items included in the overall net levy. Herbert stated the article for the paper was completed this week. Eiden asked that it be distributed to the Council. Herbert proceeded through her worksheet, explaining the line items related to debt service. Herbert stated the underserved municipalities distribution is calculated at $617,160. Today s tax rate is down 1.93% over last year s tax rate. $143,000 dollars has been removed from the budget between the preliminary levy and today. Klick asked to see the tax calculator worksheet. Herbert provided the calculation using no valuation increase, then a 4.8% valuation increase which results in a $30 decrease to a $30 increase based on a median valued home. Jakel asked about fund balance; where is it at, how is it projected to finish? Herbert stated the FMP will be reviewed later in the meeting where fund balance will be discussed. Herbert then reviewed the revenues and other financing sources worksheets. Eiden asked, regarding liquor operations, when was the store built. Staff stated it was finished in Eiden inquired if it is paid off? Staff stated yes. Herbert then reviewed the expenditures worksheets. Herbert discussed the larger percentage

2 Page 2 of 5 increase line items. 3. Enterprise Fund Budgets Utility Funds Herbert provided the summary worksheet for the enterprise fund budgets. Utilities were reviewed with Council first. Klick asked for line item review of each fund. Water revenues were explained, with a slight decrease due to wetter years. Eiden asked about the $400,000 increase to the general fund. What percentage of that number is related to the pay increase. Jakel stated he will also want to hear about the general fund reserves. Herbert stated she will address both questions after the enterprise fund discussion. Herbert proceeded through the expenditure worksheet. Water meters were discussed and the need to purchase additional meters. Herbert continued through the remaining water expenditures. Herbert reviewed depreciation line items within the utility funds. Herbert reviewed the ending unrestricted cash and investments. Jakel asked what those funds are being saved for; replacement of old water mains? Seifert stated it would be used for replacement items. Herbert then proceeded to the sewer enterprise funds and reviewed the revenues and expenditures, noting any significant changes. Seifert stated it was a conscious decision to collect a little more on the sewer rate, to be able to grow the fund for replacement issues. Herbert then reviewed the storm sewer revenues and expenditures. Seifert explained the increase in the expenditures; primarily pond cleaning. Gorecki questioned the increase in work comp. The experience mod number and the projected increase were discussed with Council. The unrestricted cash and investments line items across the utilities were reviewed with the Council. Seifert spoke on new development, saying it pays for itself. The rates pay for the replacement of items. Seifert discussed the difference between Rogers with non-treated water and other communities that have treatment plants. Two future treatment plant sites have been identified and dollars are being saved for the construction of treatment plants.

3 Page 3 of 5 Seifert stated, in 2018 we will have an agreement for the future acquisition of our wastewater treatment plant with the Met Council. Seifert then discussed the cleaning of ponds using storm sewer funds, and the need to properly dispose of the sludge from the ponds. Jakel commented on the sale of the plant to Met Council, stating in years past Council was led to believe there is value they would pay us and buy out the plant. Is that still part of the negotiation? Seifert stated, we will not come out with a positive check. We will be able to reduce cost in the future by not having to pay for future capital needs. Staff and Council then discussed the RSAC funds and the future fund balance. Liquor/RWAS/Muni Herbert reviewed the Liquor enterprise funds summary page; noting an increase of overall cash of $84,000. Buysse discussed the competitiveness of both the on-sale and off-sale locations. Buysse discussed the local competitors and the need to raise some of the prices moving forward. Buysse discussed the partners within the Muni (Lions and Rogers Fire Relief Association). Gorecki spoke on the Muni not having a huge impact, stating the off sale store is where it s at. Buysse then discussed Sunday sales for both the on and off sale locations. The increase in both have resulted in a 3% increase year-to-date. Buysse stated we are not being negatively impacted as we were last year, because of big box retail. Buysse discussed beer in grocery and the future reality of it. Jakel commented on the Muni being a placeholder for pull-tabs and meat raffles, or until some developer wants to pay us for what it s worth. It s for sale when the price is right. People go there for the service, the service of an economical beer. At this time Council took a 10 minute recess. Council reconvened at 7:28. Herbert reviewed Eiden s question first; how much of $400,000 was personnel services? Herbert explained: $150,000 is the tax court petition abatement levy. $282,000 was the increase in personnel services, including all expenses (work comp, health insurance, etc.). $75,000 to $80,000 is the new portion of the increase because of the pay plan. Herbert continued to review the increases related to personnel services. Council and staff discussed the custodian and the increase to the general government buildings

4 Page 4 of 5 personnel services. 4. City Financial Management Plan Herbert reviewed the front page of the FMP with Council. Herbert commented on 2017 tax court petition settlements, stating we broke even on the December tax payment; delinquent collections covered the cost of tax court petition settlements. Jakel asked what is the fund balance policy? Staff stated a minimum of 45% to 50%. Herbert proceeded through the line items of the front page of the FMP. Herbert reviewed the highlighted cells explaining the increases contemplated for There was discussion on the fund balance percentage and how the formula is calculated. Herbert commented on budgeting more true to actual on building permits. New Debt Levies from CIP requests were reviewed and how they are incorporated into the front page of the FMP. Jakel asked if the revenue shows the full growth of the Lennar development. Staff stated yes, it is illustrated in the growth tab which will be reviewed. Herbert proceeded through the supporting pages of the FMP document. The equipment page was reviewed and Herbert discussed the potential of a full revolving equipment fund to avoid borrowing in the future. Herbert proceeded through the fire equipment page, park page, trail dedication, IS CIP, staffing plan, and growth assumptions. Herbert reviewed the growth assumptions worksheet at length and illustrated how it is brought into the front page of the FMP. Jakel questioned, do we know enough about our growth that we should tweak the worksheet a little bit, or should it be used to reduce the $150,000? Jakel asked, if we pull out the $150,000, what does the reserve balance drop to? Herbert stated the following: levy 3.79% increase, tax rate at % and removing the $150,000 makes the fund balance 56%. Herbert then discussed the possibility of levy limits and how much you could levy in future years. Scharber stated the worksheets are not taking the relief payment into consideration, it will still be in the audit as an increase for 2018 audit; an increase to your fund balance. This would be a onetime bump in fund balance going forward. Herbert stated, by taking $150,000, you get $11,370 less in relief for 2018.

5 Page 5 of 5 Jakel commented on it being beneficial to see the utility fund balances tonight and it would have been helpful when setting utility rates at the last meeting. In the future he would like to see the two being presented together. At this time there was discussion on the philosophy of fund balance and discussion on sustaining a tax rate. Herbert provided update on the 2017 tax court petitions and the ability to recoup about $8,000 after discussing the issue with Ehlers, with the balance coming out of TIF 1. Scharber polled the Council, consensus was to remove the $150,000 from the tax court petition line. 5. RAC Financial Management Plan Herbert provided the RAC FMP to Council and proceeded through the line items. Herbert discussed the possibility of calling bonds early, in 2023, with the levy and the donations from the youth hockey and hockey boosters. Herbert continued through the line items, and then reviewed the RAC CIP items. Discussed at length was the need to replace the ice plant because of legislation against Freon. Staff and Council also discussed future use of RAC funds once the ice plant is replaced and debt is paid off. 6. Calendar Herbert reviewed the calendar with Council. Staff then asked Council about their availability for a second meeting in December. Three members stated they could make December 27th at 7:30 a.m. for a quick 5 minute meeting. Staff stated this will be on the next agenda for approval. 7. Adjourn Ihli adjourned the workshop at 9:20 p.m. Respectfully Submitted, Stacy Scharber Assistant City Administrator/City Clerk